[Federal Register Volume 61, Number 93 (Monday, May 13, 1996)]
[Notices]
[Pages 22026-22027]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-11924]
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COMMODITY FUTURES TRADING COMMISSION
New York Mercantile Exchange: Proposed Amendments to the New York
Harbor No. 2 Heating Oil Futures Contract
AGENCY: Commodity Futures Trading Commission.
ACTION: Notice of availability of the proposed amendments to the New
York Harbor No. 2 heating oil futures contract.
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SUMMARY: The New York Mercantile Exchange (NYMEX or Exchange) has
submitted for the Commission's approval, under Section 5a(a)(12) of the
Commodity Exchange Act and Commission Rule 1.41(b), proposed amendments
to its New York Harbor No. 2 heating oil futures contract. The proposed
amendments relate to the dyeing and color standards and testing
requirements for deliverable heating oil and would apply to all newly
listed and existing contracts beginning with the August 1996 delivery
month. The Acting Director of the Division of Economic Analysis
(Division) of the Commission has determined that obtaining public
comment on the proposed rule amendments is in the public interest, will
assist the Commission in considering the views of interested persons,
and is consistent with the purposes of the Commodity Exchange Act.
Accordingly, the Division, pursuant to the authority delegated by
Commission Rule 140.96, is hereby providing notice of, and seeking
comment on, the proposed rule amendments.
[[Page 22027]]
DATES: Comments must be received on or before June 12, 1996.
ADDRESSES: Interested persons should submit their views and comments to
Jean A. Webb, Secretary, Commodity Futures Trading Commission, Three
Lafayette Centre, 1155 21st Street NW, Washington, DC 20581. Reference
should be made to the New York Harbor No. 2 heating oil futures
contract.
FOR FURTHER INFORMATION CONTACT: Please contact John Forkkio of the
Division of Economic Analysis, Commodity Futures Trading Commission,
Three Lafayette Centre, 1155 21st Street NW, Washington, DC 20581,
telephone 202-418-5281.
SUPPLEMENTARY INFORMATION: The Exchange is proposing the following
primary amendments to the No. 2 heating oil futures contract:
1. Adopt the IRS Dye Requirement: The Exchange is proposing to
adopt the IRS dye requirement for tax-free sales or uses of diesel
fuel, in lieu of the current EPA specification in the futures contract.
In this regard, the Exchange is proposing two methods for testing for
dye concentration: the IRS test method and the PetroSpec dye analyzer
method.
The Exchange justified these proposed amendments by stating that:
In conversations with market participants, the Exchange has
learned that heating oil dyed to the IRS specification has become
the standard in the heating oil cash market in New York Harbor.
Market participants stated that this product became the dominant
type of heating oil this past winter after test methods became
available to measure for the IRS dye concentration. * * * [t]here
was no way to test or verify this exact level of concentration until
recently. Consequently, the IRS did not begin to enforce the dye
concentration requirement until the Fall of 1994, when the IRS
purchased the PetroSpec dye analyzer for its enforcement agents use
in the field.
In the heating oil cash market, buyers specifically request fuel
dyed to the IRS requirement. Thus, the Exchange is proposing to
adopt the IRS dye specification so that the NYMEX No. 2 heating oil
futures contract will conform more closely to cash market standards.
2. Eliminate the ASTM D1500 Color Test: The NYMEX is proposing to
eliminate the ASTM D1500 color test requirement in the heating oil
futures contract. According to the NYMEX, this test no longer is valid
for testing dyed fuel. With the dye requirement now in effect, the
Exchange stated that it is no longer possible to run the ASTM D1500
test accurately on dyed fuel, and, consequently, the cash market no
longer requires this test. The NYMEX further stated that inspectors
have been unable to assess the color of dyed fuel, the ASTM D1500 color
test is no longer performed in the cash market, since it is not useful
as a test of fuel quality for dyed heating oil.
3. Require Five Additional Tests in Lieu of the Color Test: In
order to replace the ASTM D1500 color test, and to provide
substantively similar information on fuel quality, the Exchange
proposes to adopt five additional tests of deliverable fuel oil to
measure stability, haze, carbon residue, ash, and corrosion. According
to the Exchange:
both Colonial and Buckeye Pipelines require the five additional
tests * * *. The current NYMEX heating oil specifications already
require these five additional tests only for heating oil samples
that do not meet the maximum color level of 2.5 on the ASTM D1500
color test. The proposed amendments would bring the NYMEX heating
oil futures contract specifications more into conformity with the
Colonial and Buckeye Pipeline specifications.
4. Add a Second Test Method for Carbon Residue: Finally, the
Exchange is proposing an additional test method for the carbon residue
test, i.e., ASTM D4530. According to the NYMEX, Buckeye Pipeline
specifies this test method, along with the existing test method
specified in the heating oil futures contract, ASTM D524. The NYMEX
stated that, ``inspectors from independent labs recommended that the
Exchange adopt this additional test method ``since it is newer, more
accurate, and easier to run.''
NYMEX intends to apply the amendments to newly listed contracts and
to existing contracts beginning with the August 1996 contract month.
The Division is requesting comment on the proposed amendments and
the implementation plan.
Copies of the proposed amendments will be available for inspection
at the Office of the Secretariat, Commodity Futures Trading Commission,
Three Lafayette Centre, 1155 21st Street NW, Washington, D.C. 20581.
Copies of the amended terms and conditions can be obtained through the
Office of the Secretariat by mail at the above address or by phone at
(202) 418-5097.
Other materials submitted by the NYMEX in support of the proposed
amendments may be available upon request pursuant to the Freedom of
Information Act (5 U.S.C. 552) and the Commission's regulations
thereunder (17 CFR Part 145 (1987)), except to the extent they are
entitled to confidential treatment as set forth in 17 CFR 145.5 and
145.9. Requests for copies of such materials should be made to the FOI,
Privacy and Sunshine Act Compliance Staff of the Office of the
Secretariat at the Commission's headquarters in accordance with 17 CFR
145.7 and 145.8.
Any person interested in submitting written data, views, or
arguments regarding the proposed amendments, or with respect to other
materials submitted by the NYMEX in support of the proposed amendments,
should send such comments to Jean A. Webb, Secretary, Commodity Futures
Trading Commission, Three Lafayette Centre, 1155 21st Street NW,
Washington, DC 20581 by the specified date.
Issued in Washington, DC, on May 7, 1996.
Blake Imel,
Acting Director
[FR Doc. 96-11924 Filed 5-10-96; 8:45 am]
BILLING CODE 6351-01-P
